Harrison v In Control Pty Ltd
[2013] FMCA 149
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HARRISON v IN CONTROL PTY LTD | [2013] FMCA 149 |
| INDUSTRIAL LAW – Exercise of workplace right to make a complaint or inquiry relating to employment – statutory interpretation – complaints by an employee in small business – questions of management style and disagreement by employee about management’s strategic business decisions – not complaints or inquiries in relation to employee’s employment – reverse onus of proof – assessment of compensation – application dismissed. |
| Acts Interpretation Act 1901(Cth) s.22 Evidence Act 1995 (Cth) s.140 Fair Wok (Registered Organisation) Amendment Act 2012 s.27 Fair Work Act 2009(Cth), ss.336, 341, 342, 360, 361, 545, 546, and 547 Federal Court Act 1976 (Cth) s.51(A) Federal Magistrates Act 1999(Cth) s.76(1) |
| Australian Licensed Aircraft Engineers Association v International Aviation Services Assistance Pty Ltd (2011) 193 FCR 526; (2011) 205 IR 392 McIlwain v Ramsey Food Packaging Pty Ltd (No. 4) (2006) 158 IR 181 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd & Others (1992) 110 ALR 449; (1992) 67 ALJR 170 |
| Applicant: | WILLIAM HARRISON |
| Respondent: | IN CONTROL PTY LTD |
| File Number: | BRG 365 of 2011 |
| Judgment of: | Burnett FM |
| Hearing date: | 24 April 2012 |
| Date of Last Submission: | 24 April 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 8 March 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Dwyer |
| Solicitors for the Applicant: | McCullough Robertson |
| Counsel for the Respondent: | Mr J Merrell |
| Solicitors for the Respondent: | McKay’s Solicitors |
ORDERS
The application filed on 17 May 2011 is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 365 of 2011
| WILLIAM HARRISON |
Applicant
And
| IN CONTROL PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant and the alter ego of the respondent were former business partners. Plainly they both had strong personalities. The applicant subsequently took up employment with the respondent. Matters progressed well between them particularly as it appears they did not have to work closely together. However circumstances changed when the respondent decided it was time for everyone to ‘work under the one roof’. Strong personalities come to the fore. In the result the applicant was terminated. The applicant says it was because he was seeking to exercise a workplace right by making complaints about the manner in which the workplace was managed: a matter he contended constituted a complaint or inquiry in relation to his employment: s.341(1)(c)(ii) Fair Work Act 2009 (Cth) (FW Act). The respondent says not. The applicant seeks compensation for what he alleges was adverse action taken against him in contravention of his workplace rights provided for in the FW Act.
Background
The applicant, Mr William Harrison commenced employment with the respondent, In Control Pty Ltd in the position of sales representative on 24 July 2004. He remained in that employment until terminated with effect from 1 April 2011.
There had been some history between the applicant and the alter ego behind the respondent, James Woodward. The applicant and Mr Woodward had previously been in business together. They had been social acquaintances for over 12 years prior to the material events and between July 2002 and July 2004 conducted a business engaged in the sale and installation of “Nurse Call Systems” to hospitals. They conducted that business through a corporate vehicle Bless Tech Pty Ltd, a company in respect of which they were both shareholders and directors.
In July 2004, Mr Woodward and the applicant decided to close that business down. At that point the applicant joined the respondent as an employee.
Initially the applicant worked on a part time basis for 30 hours per week. A formal contract of employment was entered into and the applicant’s duties were described as “Sales and Project Management duties and any other duties as directed”. The contract provided for termination with one month’s notice in the event that there was insufficient work and also provided for summary termination upon certain terms. For reasons which follow neither provision was apposite in the context of this dispute.
The applicant’s role in the business was as business development manager. The role involved sales, marketing development, installation, training, software and hardware support, implementation of managing software and hardware system upgrades, system sales, marketing strategies, website design and administration, purchasing of system hardware and the development of promotional materials for the respondent. Although, when initially employed the respondent had reservations concerning the prospect and feasibility of the sufficiency of the business to justify the applicant’s full time employment the circumstances proved otherwise. The applicant appears to have quickly grown the position to a point where his employment was warranted on a full time basis and the terms of his income and other allowances grew commensurately to recognise and reflect both the full time nature of his employment and the duties undertaken by him. At the time of termination his income package included both a salary of $81,900.00 per annum together with allowances for a car, reimbursement for telephone, internet and mobile phone costs. In addition he was entitled to superannuation payments and commissions in respect of sales.
There is no dispute that through the course of his employment the applicant progressed through the company from a sales and project management role to a business development role. He worked closely with two staff members, Natalie Heiner a sales person and Brett Spence a programmer. His role included managing those personnel, securing orders from existing customers, marketing and developing the respondent’s website and updating presentation packs, as well as managing the respondent’s programmer.
For the first couple of years the applicant and the two staff members he managed worked from home. The applicant plainly believed this characteristic of the business was adverse to its prospective growth. He stated that he advocated consistently for and believed that it was essential to establish a central office, rather than having employees work from home. He believed that this matter was essential due to the respondent’s growth. Plainly, the applicant’s views on these matters proved to be a source of conflict. In August 2009 the applicant organised a meeting with Mr Woodward where he had planned to discuss issues about the management direction, structure and leadership, together with the businesses’ decision making processes, the use of feedback and criticism and the effect that this was having on the respondent’s work place, together with his perceived lack of enthusiasm displayed by management. In preparation for the meeting the applicant prepared an agenda of items for discussion. They included an extensive list of grievances and made a number of observations about the respondent’s corporate culture. Mr Woodward stated that the applicant would continuously tell him, sometimes in front of the staff, that he lacked management and leadership skills and that the things he was doing with the business were wrong. Mr Woodward complained that he felt verbally abused and uncomfortable in the working environment.
Accordingly, the meeting of 13 August 2009 appears to have been cathartic. The applicant prepared his list of grievances and Mr Woodward committed his thoughts concerning the meeting to writing after the meeting.
After having considered the meeting of 13 August 2009 Mr Woodward phoned the applicant on 14 August 2009 and stated words to the effect: “You’re clearly unhappy with me and the direction in which the company is heading and I think that you should go your own way.” Mr Woodward recalls the applicant responding “Does that mean you are sacking me? You won’t sack me.” To that Mr Woodward says he responded “If that’s what you want I will send you a termination letter this afternoon.”
The applicant does not recall most of that conversation. He does however deny stating the words attributed to him. He says Mr Woodward simply told him that he was terminated.
There is no dispute between the parties that in fact his employment was terminated on that date. In a letter addressed to the applicant by Mr Woodward it was stated:
After a number of discussions it has become clear that you are unhappy with my management and leaderships skills and the direction in which In Control Pty Ltd is heading. I do not believe that either of us feels that this can be resolved and I believe that we have reached the point where we need to go our own ways. I’d like an orderly ending of your employment and would like to suggest that this be Friday, 18 September 2009.
In an email from the applicant responding to the respondent’s letter the applicant made a number of observations which provide some insight into the conversation alleged to have occurred on 14 August 2009. Notwithstanding his complaints that Mr Woodward had not made sufficient attempts to resolve the matter he identified a process issue concerning the use of software based diary as a point of difference and concluded stating:
I believe that with my management skills I have a lot to contribute but if all you want is a yes man I am sorry I am not able to fill that role.
That observation clearly alluded to the applicant’s concern of Mr Woodward’s supposed autocratic nature. Irrespective of the truth or otherwise of the underlying observation, the applicant’s comment plainly flags the tension that existed between himself and Mr Woodward concerning Mr Woodward’s management of the enterprise. Given the closed nature of the corporation the reality is, and was, that the conflict was between the applicant and Mr Woodward personally. Against that background I am satisfied on balance that Mr Woodward’s recall of the conversation is more accurate than that of the applicant.
Despite a number of meetings over the following days matters did not appear to improve although Mr Woodward noted that the applicant was apologetic and appeared depressed, accordingly he relented on the applicant’s termination and decided to use the event as a warning. He provided the applicant with the list of conditions that would govern his employment moving forward and explained to him that if he did not comply, the respondent would terminate his employment. Relevant dot points in the conditions included:
Not to try to get involved in the management of the company –stick to sales.
I am not prepared for our meetings/discussions to become a battle ground-you see passion-I see anger.
I am looking forward to a more relaxed and productive working relationship.
Matters appeared to progress relatively well until the second half of 2010 when the issue of office accommodation arose. Until that time the respondent’s business had operated from Mr Woodward’s home. The situation was plainly becoming untenable. In February 2011 a suitable property for the conduct of the business was identified and an agreement was entered into between the respondent and the lessor. It appears however that following that matter the applicant arranged separate meetings between himself and the three other employees of the respondent concerning the proposed arrangements. Mr Woodward understood that the applicant was trying to encourage each of the other three staff members to say they wished to continue working from their respective homes. However, that was not his perception of the other staff members’ attitude to the proposed move. The applicant told Mr Woodward that he did not wish to work from the new offices, stating that “I was employed to work at home and I want to work from home.”
Mr Woodward encouraged the applicant to take up space in the new office and indeed offered him the “biggest office” in the new offices, purchased a desk, a bookcase and a credenza and generally tried to make him feel comfortable with the new arrangements. As events transpired it appears that Mr Woodward was unsuccessful in that regard.
On 23 March 2011 the applicant called Mr Woodward to arrange a meeting between himself, Mr Woodward and Mr Woodward’s wife, Kristine who was also a share holder of the respondent company.
The applicant says by way of background that at this time a number of employees had approached him with concerns about the direction of the business and the behaviour of “the Director”, that is Mr Woodward. He says it was with that in mind that the meeting was called.
A meeting was arranged and took place on 24 March 2011. The applicant says that at the meeting he intended to make some inquiries about issues relating to sourcing a new location for the office and the purchasing of equipment such as PC’s and filing cabinets. He says he also intended to make complaints about the bullying of the staff; working hours in the new office; Mr Woodward’s lack of recognition for staff; lack of understanding or empathy; inattention at meetings; lack of structure or directions with the business; and, concerns that the applicant had about the dissatisfaction of staff members. These matters were minuted by the applicant in an agenda he prepared for the meeting.
The applicant says that in raising these matters, he was not criticising Mr Woodward as a manager, but was concerned about the business as it was lacking direction. He stated he was also concerned about the welfare of the respondent’s staff.
The meeting commenced at Mr Woodward’s home and progressed from about 4.00pm to about 4.45pm that day. He says that during the meeting, after he had raised approximately half the issues that he had prepared in his minute, Mr Woodward stood up aggressively and said words to the effect of “I cannot handle the criticism any more” and abruptly left the meeting.
Mr Woodward’s recollection differs slightly. He recalled that at the meeting the applicant provided him with his list of complaints and commenced to deal with issues which appeared irrelevant to him. For instance Mr Woodward recalled there was an issue about whether there would be two or three draw filing cabinets with him stating that he intended to purchase two draw filing cabinets to go under the desks as he considered that they would be neater for the staff. He noted that the applicant wished to bring his old three draw filing cabinet into the office. Mr Woodward recalled that the applicant then commenced to complain that he was not being given recognition for his contribution to finding the new office accommodation and for his views on employing a new support person. He recalled that they had reached the bullet point stating “Not attentive at meetings” when the applicant commenced to verbally abuse him by saying “James, you don’t have the management or leadership skills to run this business”.
Mr Woodward said at that point he stood up and said words to the effect: “You are being derogatory and I am not going to sit here and listen to this anymore”.
Mr Woodward said he then left the room where the meeting was being conducted and went to the main part of his house. The meeting was terminated from that point.
The list which had been tabled at the commencement of the meeting included a number of matters which were directed to issues of management. Those issues included:
Lack direction-random projects but no directions goals or plans;
Lack of understanding or empathy;
We all want to help and be part of the success of In Control, all prepared to contribute but does not seem to be any structure or positive feed back;
Ask for help this is not a sign of weakness but strength. That is a sign of a true leader. A narcissistic approach is due to fail.
The applicant denies that the closing comments should be attributed to him. In particular, he denies the statement attributed to him that he stated Mr Woodward didn’t have the management or leadership skills to run the business. In my view nothing turns on the difference between statements because on either version, the intent has a common theme.
However, notwithstanding the applicant’s denial of the earlier statement attributed to him by Mr Woodward, I am satisfied on balance that a statement to that effect was made. It is entirely consistent with the number and nature of management issues that were identified in the various dot points included in the minute that was tabled for the meeting.
The meeting concluded and later that day the applicant telephoned Mr Woodward. Mr Woodward says the applicant stated in the course of that conversation “I’m sorry if I have upset you. I love working with the company and I am passionate about it.”
The applicant says he said words to the effect of “I didn’t mean to upset you”.
In my view nothing turns on the difference between their respective recollections. Mr Woodward says he stated to the applicant “Bill I am not prepared to accept your apology. You are doing it on purpose.”
While the applicant denies that statement having been made, the statement was in my view entirely consistent with the statement Mr Woodward earlier attributed to the applicant and I accept that it was made.
On Friday 25 March 2011, Mr Woodward called the applicant and emailed a request for him to meet at his house. A meeting was arranged for Saturday 26 March 2011. In the meantime Mr Woodward went to the Fair Work Australia website and printed off the small business dismissal code. He filled out the small business dismissal code material and typed up a termination letter. When the applicant attended at his residence on the 26 March 2011 Mr Woodward handed to him the letter. At that time the applicant took the letter, read it and responded with words to the effect “I do not understand why you are terminating my employment I have done nothing wrong”.
At this point Mr Woodward stated to the applicant “Bill you have crossed the line again and I am not prepared to go on like this.”
At that point the applicant offered to work as a consultant but Mr Woodward rejected that offer.
On 30 March 2011 the applicant attended at Mr Woodward’s request to hand over his duties to another employee. At that meeting it was verbally agreed between Mr Woodward and the applicant that although the letter suggested that the applicant’s employment would end on 29 April 2011 the end date would be 1 April 2011 with the applicant being paid one months pay in lieu of notice. The payment in lieu of notice took the applicant’s effective day of termination to 3 May 2011.
The respondent contends that it did not terminate the applicant’s employment because the applicant had made inquiries or complaints about his employment but rather because Mr Woodward believed that the applicant had become impossible to work with, would simply not conform with the business and would not accept any management decision which he made. In his view the applicant’s behaviour was inconsistent with a continuation of his employment contract and with the terms provided by their agreement of August 2009.
The Applicant’s Claim
The applicant alleges that the respondent has contravened the provisions of Part 3-1 – Division 3 of the FW Act in that the respondent has taken adverse action against him because he exercised a workplace right by making complaints in relation to his employment. Section 341(1)(c)(ii) provides that a person has a workplace right if a person is able to make a complaint or inquiry, and if the person is an employee – in relation to his or her employment.
In particular the applicant alleged in his statement of claim that he purported to:
Exercise his workplace right to make a complaint or inquiry relating to employment issues, including:
a. Sourcing a new location for the office;
b. The bullying of staff in relation to working hours in the new office;
c. Purchasing of equipment such as PC’S and filing cabinets;
d. [Mr Woodward’s] lack of recognition for staff, lack of understanding or empathy and inattention at meetings;
e. The lack of structure or direction within the business; and
f. Concerns about another staff member’s dissatisfaction.[1]
[1] Form 2-Part 6-Paragraph 20
The adverse action said to have been taken in respect of the applicant’s purported exercise of a workplace right was “constituted by the Respondent terminating the Applicant’s employment two days after the Applicant made the complaints and inquiries in relation to his employment and on behalf of other employees.”[2]
[2] Form 2-Part 6- Paragraph 14
The applicant contends that by reason of the respondent’s contravention of the FW Act he has suffered loss and damage and now claims for compensation of $110,075.00 together with interest and costs made up as:
Lost Income – 11 months
$75,075.00
Hurt and Humiliation
$20,000.00
Pecuniary Penalty
$15,000.00
Total:
$110,075.00
Respondent’s Response
The respondent denies that it took adverse action against the applicant because of complaints made by the applicant. In particular it denies the applicant purported to exercise a workplace right within the meaning of s.341(1)(c)(ii) FW Act because it contends:
a)The applicant did not make a complaint or inquiry in relation to his employment by virtue of a provision in a statute or industrial instrument; and or alternatively
b)The issues raised by the applicant at the meeting on 24 March 2011 were not in relation to the applicant’s employment but were in relation to:
(i)Other employees;
(ii)The competence of Mr Woodward, a director of the respondent;
(iii)Filing cabinets for the new office;
(iv)The sourcing of the respondent’s new offices.
Statutory Framework
So far as it is relevant the applicant’s rights are provided for in Part 3-1 of the FW Act which deals with the “General Protections”.
Section 336 of the FW Act outlines the objects of the parts. Relevantly it provides:
336 Objects of this Part
The objects of this Part are as follows:
(a) to protect workplace rights…
Division 3 of Part 3-1 of the FW Act deals with workplace rights. In particular s.340, s.341 and s.342 deal with “Protection”, “Meaning of Workplace Right”, and meaning of “Adverse Action”, respectively. Relevantly for this application those sections provide:
Division 3—Workplace rights
340 Protection
(1)A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right;or…
341 Meaning of workplace right
Meaning of workplace right
(1) A person has a workplace right if the person…
(c) is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii)if the person is an employee—in relation to his or her employment.
Meaning of process or proceedings under a workplace law or workplace instrument
(2) Each of the following is a process or proceedings under a workplace law or workplace instrument:
(a) a conference conducted or hearing held by FWA;
(b) court proceedings under a workplace law or workplace instrument…
342 Meaning of adverse action
(1)The following table sets out circumstances in which a person takes adverse action against another person.
| Meaning of adverse action | ||
| Item | Column 1 Adverse action is taken by ... | Column 2 if ... |
| 1 | an employer against an employee | the employer: (a) dismisses the employee… |
Applicant’s Claim
The applicant submitted, and I accept, that there is no issue between the parties concerning his dismissal as constituting adverse action for the purpose of s.342. The parties were in dispute on two matters namely:
1.The applicants conduct at the material time was in respect of a “workplace right” or exercising a “workplace right”; and
2.Whether the adverse action was taken because the applicant was seeking to exercise a workplace right.
Workplace Right
The question of whether or not the underlying facts constituted a workplace right arose as a threshold issue. The respondent contended the applicants alleged “inquiries or complaints” concerned the employment issues[3] of and were made on behalf of other employees[4] and in any event they were not in relation to “his employment”[5], that is the applicant’s employment.
[3] Form 2 –Part 6 – Paragraph 14
[4] Form 2 – Part 6 – Paragraph 20.
[5] Response – Paragraph 3.
The applicant particularly contended that the relevant workplace right being pursued by him was a right under s.341(1)(c)(ii) to make a complaint or inquiry as an employee in relation to his employment. It was submitted that the subsection does not limit the class of persons to whom a complaint or inquiry may be made and by its drafting does not exclude a person who makes a complaint or inquiry to his or her employer: Hodgkinson v The Commonwealth (2011) FMCA 171 at [131]. Accordingly it was submitted that consistent with the construction of the subsection in the broadest possible terms, complaints about interoffice issues or workplace conflict have been held to constitute the exercise of a workplace right for the purposes of the subsection: Ramos v Good Samaritan Industries (No.2) [2011] FMCA 341, Stevenson v Air Services Australia (2012) 218 IR 210.
It was submitted that at the meeting on 24 March 2011 the applicant sought to raise concerns with Mr Woodward about the issues which were set out in the agenda, exhibit JW6 to the affidavit of James Woodward.
It is not in contest that at that meeting the agenda items identified in exhibit JW6 were discussed to the point at which Mr Woodward left the meeting. It was submitted that each of these matters represents a matter of “concern” to the applicant “in relation to his…employment” and that it follows that each of the agenda items were the subject of “complaint or inquiry” by the applicant “in relation to his… employment”. It was contended that the wording of the subsection does not import or imply any requirement that the “complaint or inquiry” made must be “significant, valid, reasonable or even reasonably made”. That is to say, access to the protections afforded under the subsection are not limited by the nature of the complaint or inquiry or the manner in which it is made.[6]
[6] Applicant’s outline of argument at paragraph 20 and 21
For the respondent it was submitted that because of the words used in s.341(1)(c)(ii) of the FW Act namely, that the relevant employee “is able to make a complaint or inquiry…in relation to his or her employment”, the section expressly contemplates that such a complaint or inquiry is one that can only be made by an employee who has the capability or capacity, or some authority or right, as conferred by a provision in a statue or an instrument, such as an enterprise agreement or contract of employment, to make the complaint or inquiry: not that the complaint or inquiry can be made by the simple fact of the complainant being an employee of the employer.[7]It was submitted that a construction of subparagraph (ii) which meant a complaint or any inquiry by an employee simpliciter constructed a workplace right would render the words “is able” in s.341(1)(c) otiose with those words having unknown meaning and no work to do. It was contended that consistent with a settled principle of construction a court in construing a statutory provision must strive to give meaning to every word of the provision and that no clause, sentence or word shall prove superfluous or insignificant if by any other construction that may be made useful and pertinent: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [71] per McHugh, Gummow, Kirby and Hayne JJ.
[7] Respondent, Submission – paragraph 71
The question of the proper construction of s.341(1)(c) has not been previously the subject of express judicial consideration. In Nulty v Blue Star Group Pty Ltd [2011] 203 IR 1 page 14 at paragraph [49] some obiter comment was made by the Full Bench of Fair Work Australia about s.341(1)(c). The comment was made in the context of an application for permission to appeal and the appeal in respect of an alleged breach of s.340 based upon a complaint of bullying and harassment made by the appellant employee against another employee to the general manager of the respondent. The submission proceeded that s.340 would be breached if the respondent took adverse action because the complaint to the general manager amounted to the exercise of a “workplace right” within the meaning of s.341(1)(c)(ii). At [48] the full bench proceeded;
The issue is whether the criteria in s.341(1)(c)(ii) is met whenever an employee makes complaint to a responsible senior manager as a mere incident of the employment relationship. We are inclined to think that is it not (sic)[8] and that s.341(1)(c)(ii) contemplates that the employee is “able” to make the complaint by virtue of some provision in a statute or an instrument such as an enterprise agreement or contract of employment. However, the appellant made no submissions on s.341(1)(c)(ii) and the respondent was not given an adequate opportunity to be heard in relation to this question. We do not think it is appropriate to express a concluding view on that issue in the absence of argument.
[8] The Full Bench has since issued a corrigendum to correct the words to read “it is not”.
The only other decisions referred to in argument are the decisions of this court in Stevenson v Air services Australia (Supra) and Ramos v Good Samaritan Industries (Supra). It is apparent from the judgments in each of those decisions that the issue now raised by the respondent was not agitated. In each instance the Court there simply proceeded upon the basis that a complaint by an employee to a relevant person in authority of the employer was sufficient to make out a workplace right for the purposes of s.341(1)(c)[9]
[9] Stevenson v Airs Services Australia at [153]; Ramos v Good Samaritan Industries (No.2) at [26].
The applicant contends that as a matter of judicial comity I ought to follow those decisions.
The approach of courts to date has clearly been to afford the words a construction consistent with that interpretation of the words. Some support for that approach can be gleaned from the Explanatory Memorandum for s.341(1)(c)(ii). In respect of that clause in the Fair Work Bill 2008 the Explanatory Memorandum observed:
1370. Subparagraph 341(1)(c)(ii) specifically protects an employee who makes an inquiry or complaint in relation to his or her employment. Unlike existing paragraph 659(2)(e) of the WR Act, it is not a prerequisite for the protection to apply that the employee has “recourse to a competent administrative authority”. It would include situations where an employee makes an inquiry or complaint to his or her employer.
That paragraph was followed by illustrated examples the first of which is apposite. It postulated the following illustration as a situation that would be captured by the provision. It postulated:
Rachel is employed in a night fill position. The ladder that she uses at work to stock the shelves is missing a rung which makes it dangerous for her to climb. Rachel raises this issue with her employer. Under subparagraph 341(1)(c)(ii) Rachel has a workplace right because she has made a complaint/inquiry to her employee in relation to her safety concerns regarding the ladder.
The illustrations however, also serve to amplify the fact that the complaint must be sourced in an underlining contractual and/or statutory obligation governing the employer/employee relationship. In the case illustrated by the Explanatory Memorandum the employer’s implied contractual obligations and or statutory obligations concern those in respect of Workplace Health and Safety. Such an approach is consistent with the obiter view in Nulty v Blue Star Group Pty Ltd (Supra).
The respondent submitted the remarks of Collier J in Jones v Queensland Tertiary Admissions Centre Ltd (No.2) (2010) 186 FCR 22 to further support that contention. There her Honour was considering, inter alia the meaning of s.341(1)(b) which also engages the term “is able”. The case there provided a linkage between subparagraph (b) and (c) because the law concerned the employee’s ability to “initiate, or participate in, a process or proceeding under a workplace law or instrument.”
The respondent contended the words “able to make” employed in s.341(1)(c) should be construed consistently with the words “able to initiate” employed in s.341(1)(b).
In his submissions the respondent’s counsel submitted that the requisite right to be “able to initiate, or participate in, a process of proceedings under a workplace law or workplace instrument” denotes the right or the authority of a person to participate in the relevant proceedings; that “right” did not mean a right arising from the FW Act.[10] In particular he relied upon her Honour’s observations in Jones(Supra) at [53] where her Honour observed:
53…I do not consider “right” in this context means a right arising from the Act…I consider that an ability or “right” to participate can arise from, for example, an authorisation given by an employer… to an employee…to be its spokesperson in enterprise agreement negotiations.
[10] The respondents’ submissions’ at paragraph 75.
By analogy it was contended the same approach would apply to a “complaint or inquiry” by an employee in relation to “his or her employment”. That is to say, the employees’ ability to make a complaint or inquiry concerning his or her employment must be sourced in the FW Act, that is for instance by an award, provision or contractual term governing the employment relationship.
In my view a close examination of her Honour’s reasons confirms that her remarks whilst apposite to s.341(1)(b) are not intended to apply generally. The common words in s.341(1)(b) and (c) are the words “is able”. Her honour carefully examined the meaning of the world “able” and her conclusions are expressed at paragraph [52]. I accept her interpretation of the term “able” as construed for the purpose of s.341(1)(b) applies with equal force to subparagraph (c). However, beyond the consideration of the common words in those provisions the issues addressed in subparagraphs (b) and (c) are entirely different and distinct.
My attention was directed to and I noted her Honour’s observations concerning the Explanatory Memorandum at paragraph [57] and I accept her Honour’s observations at [57] as they apply to the illustration in the Explanatory Memorandum concerning s.341(1)(c)(i). However the circumstances of clause (ii) differ in that the complaint or inquiry must concern the subject employee’s employment. The “ability” is directed to “his or her employment”. The matter of employment is contractual albeit subject to the statutory framework. It follows in my view that the use of the personal pronouns “his/her” are in the context of and concern employment. This confines the employee’s ability to “complain or inquire” in respect of matters personal to the employee as governed by that persons contractual arrangements and or the statutory framework. In my view the reference in subparagraph (c)(ii) to being “able” to “make a complaint or inquiry...” “in relation to his or her employment” is not an ability at large as applies to s.341(1)(b) because the context of s.341(1)(c) differs significantly from that earlier provision.
Ultimately, the question concerns proper construction. The applicant’s approach is to afford a very wide application to determine “is able” when applied to the terms “complaint or inquiry” by contending for a disjunctive use of the word “or” where it appears between subparagraph (c)(i) and (ii). The respondent says the ambit of the provision’s application is limited. In particular the respondent submits it is limited to instances only where a complaint can be made to a “person or body”. The respondent’s approach requires the reading of subparagraph (c)(i) and (c)(ii) cumulatively.
Subparagraphs 1(c)(i) and 1(c)(ii) are separated by the disjunctive “or”. The word “or” usually intends a disjunctive meaning. However in Pearce and Giddes the learned author’s observe:
One quite often finds arguments being put to the Court that items connected with “or” should be treated as being cumulative. In some instance these arguments have been successful.[11]
[11] Statutory Interpretation Australia 6th Edition D C Pearce, R S Giddes Lexus Nexis Australia 2006 at [2.25] page 47
The authors illustrate the court’s approach to the construction problem often presented. The authors note two broad approaches of the court. The first is to conclude a printing or drafting error which requires correction. The second approach, which I think is apposite in this case, is that the term was not used in error but:
By reference to the context in which the word appears the cumulative effect of the provision should not be dictated by the presence of the word in question.[12]
[12] At [2.25] page 47
In my view the context lends support to a cumulative construction. It is plain given the use of the term “person” in the opening sentence of s.341 that “person” refers to more than an individual employee. Section 335 provides that the term “employee” has its ordinary meaning in the Part.[13] The term “person” includes a body corporate or corporation as well as an individual: s.22 Acts Interpretation Act 1901 (Cth).
[13] The definition of “Employee” in section 4 restates that.
The Fair Work (Registered Organisation) Amendment Act 2012 provides that upon registration an organisation becomes a body corporate under Fair Work Australia: s.27 and thereby it becomes a “person” for the purpose of the Acts Interpretation Act 1901 (Cth).
As with an employee, a registered organisation is able to make a complaint or inquiry to a body having the capacity under a workplace law to seek compliance with that law or a workplace instrument: s.341(1)(c)(i). Likewise an employee can also do so under s.341(1)(c)(i). However, clause (ii) provides a significant caveat to an individual’s rights under clause (i). That is to say, a person who is an employee may only do so in respect of “complaint or inquiry…” “…in relation to his or her employment”.
If “or” is read to be cumulative it means a workplace right arises when an employee “is able to make a complaint or inquiry…” “to a person or body having the capacity…” “…in relation to his or her employment”.
The alternative construction contended for by the applicant is simply that an employee “is able to make a complaint or inquiry…” “…in relation to his or her employment”. Respectfully that contention is so wide as to be almost meaningless. Rhetorically, considering the second approach the question must be asked: To whom? To his neighbour; spouse; or perhaps best friend? Following is what kind of complaint or inquiry can be entertained. Unless the complaint or inquiry itself has to be substantive in the sense that it would engage the jurisdiction of a body having the capacity under a workplace law to seek compliance the ambit would be too far reaching and certainly beyond the objects provided for in the s.336. For instance, as in this case, what jurisdiction does any organisation have to tell the proprietors how to better run their business? Can the current complaint really be a proper complaint? What is its contractual or statutory basis? Is there really to be implied into a contract of employment between an employer and employee a term that the employer will only employ ‘nice’ people or organisationally cohesive people?
The object of the relevant part of the FW Act is inter alia to protect workplace rights and to provide relief in the event of contravention. Against that background it seems patent that if complaints and or inquiries are to enliven rights they must be of the kind that would invite the intervention of bodies having the capacity to enforce compliance. Implicit in that, is not only the question of jurisdiction but also the substance of the subject matter of complaint.
Affording a construction that affords the word “or” a cumulative as apposed to a disjunctive construction, does in my view, more amply achieve the objects set out in s.336. It follows, that in my view, the word “or”, where it appears in s.341(1)(c), imposes a cumulative rather than a disjunctive requirement. The effect is that the section is to be read restrictively as contended for the by the respondent and not broadly and at large as contended for by the applicant.
I note that such an approach would comfortably accommodate the illustrated example provided for in the Explanatory Memorandum and consistent in part with the general expression of the Explanatory Memorandum at cl. 1370 which although broadly expressed is subject to the limitation apparent from the illustrated example.
Accepting my construction of s.341(1)(c)(ii) the factual issue to determine is whether the matters addressed by the applicant at the meeting of 24 March 2011 concerned complaints and inquiries concerning and confined to the applicant’s employment or stood to matters concerning either the terms of the contractual relationship or, as otherwise governed by the statutory framework.
I have earlier referred to the contract of employment which was entered into between the parties in 2005. After the events of 2009 the parties agreed to the applicant’s continued employment with the respondent in terms expressed in Exhibit JW5 to the affidavit of Mr Woodward. As he stated, and I accept, Mr Woodward provided the applicant with a list of the conditions and was told that if he did not comply the respondent would have no choice but to terminate the applicant’s employment. Relevantly those conditions included:
Conditions for BH to continue working with In Control,
· BH to concentrate on Top Cat sales;
· BH to develop a sales team focused on Top Cat Sales;
· BH not to try to get involved with the management of the company-stick to sales.
· I am not prepared for our meetings/discussions to become a battleground-you see passion-I see anger.
· I am looking forward to a more relaxed and productive working relationship
I accept the initial contract was varied by the introduction of those additional terms.
By reference to the agenda prepared by the applicant for the meeting of 24 March 2011 he was in breach of the third dot point namely not to get involved in the management of the company. An examination of the meeting agenda for 24 March 2011 does not identify one solitary point which could be said to be directly relevant to the applicant’s terms of employment as governed by either the contract between the parties or by statute. The agenda sought solely to address matters which were the prerogative of management.
In fact it was evident from the cross examination of the applicant and the concessions made by him in the course of that cross examination, that the matters discussed at the meeting of the 24 March 2011 were directed to issues of management and Mr Woodward’s management style. Although the applicant either denied or did not recall making statements alleged against him, such that Mr Woodward was egocentric or a narcissist I am satisfied he made those statements. Not only does Mr Woodward contend the statements were made but other employees whose evidence was not challenged gave evidence to that effect. For instance Mr Garton a software programmer recalls the applicant telling him on a number of occasions that Mr Woodward was “egocentric”. Likewise Ms Childs the account development manager swore that the applicant had said to her that Mr Woodward was “egocentric” and had “a poor management style”. Mr Spence another software programmer gave similar evidence. In addition Mr Garton noted to him “it appeared to be a clash of personalities”. Similar observations were made by Ms Heiner and Mr Spence. Again these observations were unchallenged.
Ultimately I am satisfied that in this instance the difficulties between the applicant and Mr Woodward related to their personalities. The applicant plainly had difficulties with Mr Woodward’s management of the enterprise and expressed his discontent with Mr Woodward’s approach. However none of the matters raised by the applicant directly concerned his employment. So much was evident from not only the terms of the agenda for the meeting of 24 March 2011 but also the observations made by the applicant following the meeting when Mr Woodward left the room. Ms Staplyton says that after Mr Woodward left the room the applicant told her that he was only saying these things (being a reference to the matters the subject of the agenda) as he thought that Mr Woodward did not have the right skills to move the company into the future. She recalls that he said words to the effect
I just don’t think that James has the people skills to manage the company and I am only bringing up these points because I care so much about the company.
While the applicant denies using those terms expressly he does acknowledge using words generally of that kind although he contends for a different meaning. Ms Staplyton was not cross examined on her recollection of that matter. Notwithstanding that failure to cross examine I am generally satisfied of Ms Staplyton’s recollection. Although she was a director at the time she is now no longer a director and arguably can claim some independence. However, more significantly the point of difference between the applicant and Ms Staplyton is not of moment in the broader picture. In broad terms Ms Staplyton and the applicant both concede that there was some discussion concerning overall management following upon Mr Woodward’s departure from the room. On any version it is plain in my view that the applicant and Ms Staplyton continued their conversation after Mr Woodward departed the meeting. In that conversation they addressed the principal subject matter of the offending conversation, namely the management of the company. The conversation did not concern the applicant’s employment as such.
In the circumstances having regard to my view of the proper construction of s.341(1)(c)(ii) the “complaints or inquiries” of the applicant were not “in relation to his…employment”.
In my view the events in issue preceding the adverse action did not give rise to a workplace right and accordingly there was no contravention of s.341(1) as the adverse action was not taken “because” the applicant had a “workplace right”. On this basis I consider the application must fail.
Reverse Onus
In the event I am incorrect in my conclusion concerning whether or not the applicant had a workplace right available for protection under s.340, it is appropriate that I proceed to consider the applicant’s complaint and whether the respondent can prove the adverse action taken by it against the applicant was for a reason other than a reason that would constitute a contravention of Part 3-1 of the FW Act.
Section 360 and 361 of the FW Act are relevant. They provide:
360 Multiple reasons for action
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
361 Reason for action to be presumed unless proved otherwise
(1) If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings arising from the application, that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2) Subsection(1) does not apply in relation to orders for an interim injunction.
It is not in contest that the respondent by dismissing the applicant took adverse action within the meaning of s.342(1) item 1 column 1 and column 2 (a). However for a contravention to be established s.340(1)(a) requires that it be “because” the employee has a workplace right or has exercised a workplace right. In this instance the applicant complains that he has exercised a workplace right by making a complaint or inquiry in respect of his employment. Although for reasons I have addressed earlier I do not consider that the applicant has in these circumstances had a workplace right I now proceed on the premise he did in fact have such a right as there is a basis to believe the adverse action was taken because the applicant exercised a workplace right. Such a finding would then engage the operation of s.360 and s.361 of the FW Act.
At the time of trial, the relevant approach to the application of s.361 was informed by the majorities’ view in Barclay v The Board of Bendigo Regional Institute of Technical and Further Education (2011) 191 FCR 212. Subsequently in The Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 (7 September 2012) the High Court reversed the Full Court’s decision. Although separate reasons were delivered (French CJ and Crennan J, Gummow and Hayne JJ and Heydon J). The High Court unanimously rejected the approach of the majority of the Full Court (Gray and Bloomberg JJ). In broad terms the Full Court’s view was s.360 required objective consideration including, consideration of unexplained thoughts.
French CJ and Crennan J at [44] expressed it in these terms:
[44] There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression "because" in s.340, or the statutory presumption in s.361, as requiring only an objective inquiry into a defendant employer's reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s.361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains "why was the adverse action taken?
Gummow and Hayne JJ in commenting on the correct approach observed at [127]:
[127] In determining an application under s.[340] the Federal Court was to assess whether the engagement of an employee in [exercising a workplace right]was a “substantial and operative factor” as to constitute a “reason”, potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence led to discharge the onus upon the employer under s.361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision maker at the time the adverse action was taken which was the focus of the inquiry.
Heydon J at [140] expressed it as follows:
[140]…the word “because” requires an investigation of [the decisions makers] reasons for [his/her] conduct. Section 360 provided that “a person takes action for a particular reason if the reasons for the action include that reason.” The Explanatory Memorandum makes it clear that to satisfy s.360 the particular reason must be an operative or immediate reason for the action”. Under s.361 of the Act, it is presumed that the action was taken for a prohibited reason, unless the employer proves otherwise. Examining whether a particular reason was an operative or immediate reasons calls for an inquiry into the mental processes of the person responsible for that action.
Their Honours French CJ and Crennan J in particular endorsed the test which was applied by the trial Judge (Tracey J) who in his reasons stated:
[34] The task of the court, in a proceeding such as the present is, then, to determine why the employer took the adverse action against the employee. Was it for a prohibited reason or reasons which included that reason? In answering this question evidence from the decision-maker which explains why the adverse action was taken will be relevant. If it supports the view that the reason was innocent and that evidence is accepted the employer will have a good defence. If the evidence is not accepted the employer will have failed to displace the presumption that the adverse action was taken for a proscribed reason.
[35] If an employer, who is alleged to have contravened one of the provisions of Part 3-1 in which the word “because” is to be found, adduces evidence which persuades the court that it acted solely for a reason other than one or more of the impermissible reasons identified in a particular protective provision, it will have made good its defence. Because of the reverse onus provision the employer will normally need to call evidence from the decision-maker to explain what actuated him or her to act to the employee’s detriment. As Buchanan J said in Seymour (at 14), the employer will usually have to provide “sworn evidence denying any [proscribed] reason...and, in most cases, an explanation of the real reason for [the adverse action] consistent with the absence of [proscribed reasons] is, in a practical sense, also necessary”. That evidence can be tested in the light of established facts. The credibility of the decision-maker will be assessed by the court.[14]
[14] Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2010] FCA 284: (2010) 193 IR 251 at 260-261
It is that approach which I adopt in this instance.
However before proceeding to do so, a further matter of discussion and observation by the High Court concerned the question of onus. Generally on that matter, the members of the court agreed with the observations in General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605; (1976)51 ALJR 235 and in particular the observations of Gibbs J (as his Honour then was) at 239-612 where his Honour stated:
The onus of proving that the fact that the employee held the position was not a substantial and operative factor in the dismissal is to be discharged according to the balance of probabilities and has not been made heavier by any presumption that if an employee who is dismissed for disruptive activities happens to be a shop steward the latter circumstance must have something to do with his dismissal.[15] [16]
[15] The Board of Bendigo Regional Institute of Technical and Further Education v Barclay at [57] (per French CJ and Crennan J) at [59]
[16] Gummow and Hayne JJ at [128]; and Hayden J at [149].
Likewise, in Liquor Hospitality & Miscellaneous Union (LHMU)v Arnott’s Biscuits Ltd (2010) 188 FCR 221, Logan J in discussing the relevant standard of proof provided for in s.140 of the Evidence Act1995 (Cth) observed concerning this part of the FW Act:
[13] Subject to the operation of ss.360 and 361 of the Fair Work Act, the Union carries the burden of proving the alleged contravention. While the proceedings are still in character, they are none the less penal. Thus, though the union must prove the contraventions on the balance of probabilities, s.140(2) of the Evidence Act 1995(Cth) requires that; due regard be given to the nature of the cause of the action or defence; the nature of the subject matter of the proceedings; and the gravity of the matters alleged. That subsection of the Evidence Act is a reinstatement of a well known passage in the judgment of Dixon J (as is Honour then was) in Briggenshaw v Briggenshaw (1938) 60 CLR 336 at [362] in relation to considerations which intrude in deciding whether the standard of proof in the civil proceedings has been met, “the seriousness of the allegation made, the inherit unlikely hood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must effect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.
Plainly the burden of proof throughout the proceedings remains the civil burden with satisfaction being on the balance of probabilities. However, that matter is tempered by the strength of evidence required to establish the necessary facts on the balance of probabilities which may vary according to the nature of what is sought to be proved. As was observed by the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd & Others (1992) HCA 66; (1992) 110 ALR 449 at 449-450.
… The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what is sought to prove.
It should not be forgotten that the Briginshaw v Briginshaw (1938) 60 CLR 336 test is commonly considered in the context of the onus of proof upon applicants, particularly where such proceedings may have penal consequences.
However, in the ordinary course in any criminal proceeding the defendant is only required to establish a defence on the balance of probabilities. That is to say, the Briggenshaw test does not have any relevance to onus in the context of a defence.
In Sodeman v R (1936) 55 CLR 192 Dixon J said at [216]:
Where by statute or otherwise the burden of disproving facts or of proving a particular issue is thrown upon a party charged with a criminal offence, he is not required to satisfy the tribunal beyond reasonable doubt. It is sufficient if he satisfies them in the same manner and to the same extent as is required in the proof of a civil issue.
In LHMU v Arnott’s Biscuits (Supra) at [15] his Honour appears to have endorsed this approach.
In this instance I have had regard to the higher degree of satisfaction that is required in the context of the application. Having regard to that, I am satisfied on the balance of probabilities as to the material facts as I find them and relied upon to support the applicant’s claim. As I have earlier observed not much by way of significant dispute lies between the applicant and the respondent in respect of the material facts necessary to be established to enliven the claim.
The real issue is whether the respondent has demonstrated that the adverse action taken in respect of the proposed workplace right has been proven by it to have been taken for a reason or with an intent other than that which would constitute a contravention. That is to say the adverse action, when taken, was not taken for a reason which was “a substantial or operative prohibited reason”: See General Motors Holden Pty Ltd v Bowling (Supra) cited with approval in The Board of Bendigo Regional Institute of Technical and Further Education v Barclay (Supra) at [59] per French CJ and Crennan J; [104] and [126] per Gummow and Hayne JJ; and, at [149] per Heydon J.
What then was the respondent’s reason? Do I accept his explanation; and, does his explanation demonstrate on the balance of probabilities, that the reason for the adverse action was not a substantial and operative prohibited reason for the decision?
I accept the respondent’s recollection of events as being more reliable than and preferable to the recollection of the applicant. In his evidence the respondent explained the circumstances leading up to and the events of the meeting of 24 March 2011. The events of that meeting appear to have constituted “the last straw” in a longstanding clash of personalities between two people who worked closely together in a small enterprise in which one of them had no material interest beyond employment. There had been a history of mild insubordination and insolence between the applicant and Mr Woodward over a period of time. No doubt given the lengthy history between the parties a more tolerant and less regimental approach to these issues had been permitted to pass. However, the meeting of 24 March 2011 brought matters to a head such that Mr Woodward concluded that the applicant’s behaviour had crossed the Rubicon and he regarded it as inappropriate.
Mr Woodward consulted the small business dismissal code for guidance. He swore that he did not dismiss the applicant as a result of the complaints made but rather as a result of his behaviour being inconsistent with the continuation of his employment contract in its terms as provided in August 2009. He swore that the applicant simply became impossible to work with and would not conform to the requirements of the business or accept the management decisions which Mr Woodward had made. In my view Mr Woodward’s reasons for termination had a proper basis and foundation particularly in the context of a small business environment such as this. It is the capital of the proprietor which is at risk in such enterprises and management requires a more hands on approach by the proprietor. Whilst a larger and more bureaucratic organisation might permit some degree of “industrial democracy” the fact remains that in small enterprise a harmonious working relationship between all those engaged in that enterprise is far more critical than might be necessary in an organisation where scale permits segregation of discordant parties. I accept the respondent’s evidence that it was the insubordinate and rebellious attitude directed by the applicant to Mr Woodward in his conduct towards respondent which was the substantial and operative reason for Mr Woodward’s decision to terminate the applicant’s employment. I am satisfied that Mr Woodward was truthful in his denials. I accept he did not dismiss the applicant because he made a “complaint or inquiry about his employment”.
Accordingly even if I am wrong in my construction of s.341(1)(c)(ii). I am satisfied that the applicant was not dismissed because he was able to make a complaint or inquiry in relation to his employment. In my finding he was dismissed because the personal relationship between he and Mr Woodward and manifested by the applicant’s conduct toward Mr Woodward had reached a point where in a small enterprise the clash of personalities could no longer be accommodated. The decision to terminate the applicant’s employment was ultimately made because it served the paramount interest of the corporation that there be a functional relationship between all employees.
Quantum
Notwithstanding my view on liability I am obliged to assess quantum. Section 545 provides that the court may make any order it considers appropriate if it is satisfied that a person has contravened a civil remedy provision. That includes “an order awarding compensation for loss that a person has suffered because of the contravention”: s.545(2)(b). In addition the court may also order a person to pay a pecuniary penalty that the court considers appropriate, where it is satisfied that person has contravened a civil remedy provision: s.546(1).
In this case the applicant makes claim in his application for compensation in the sum of $110,075.00 as earlier particularised. It was submitted for the respondent, and I accept, that in broad terms the matter of how compensation is computed is as was stated by Barker J in Australian Licensed Aircraft Engineers Association v International Aviation Services Assistance Pty Ltd (2011) 193 FCR 526 at [423] where his Honour stated:
[423] In accordance with the usual principle, an order awarding compensation must be assessed on the basis that an applicant establishes the loss that a person has suffered because of the contravention and that this requires an appropriate causal connection between the contravention and the loss claim.
The compensation for loss pursued by the applicant is for both non-economic and economic loss.
Concerning non-economic loss it now appears settled that s.545(2) affords the court power to award compensation in respect of non-economic loss for distress, hurt or humiliation: Australian Licensed Aircraft Engineers Association (Supra) at [447]. However that power is not unlimited. As Greenwood J stated at paragraph [87] in McIlwain v Ramsey Food Packaging Pty Ltd (No.4) [2006] FCA 1302:
[87] In reaching the conclusion that it is appropriate in the circumstances of the case to order compensation, I recognise that compensation must be confined within reasonable limits and that restraint is required (Burazin v Blacktown City Guardian Pty Ltd (1996/1997) 142 ALR 144 at 156). In addition, not every termination of employment will attract compensation. In Burazin, their Honours Wilcox CJ, Von Doussa and Marshall JJ concluded that in the circumstances of that case, there were ‘unusual exacerbating circumstances that make it appropriate to include in the compensation an allowance for distress unnecessarily caused to Mrs Burazin’. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACI Operations Pty Ltd [2006] FCA 122 at [11], Marshall J concluded that something more than the usual element of distress which accompanies most terminations must be demonstrated although the notion of ‘unusual and exacerbating circumstances’ is not necessarily the test. In Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (Western Australian Branch) (1995) 63 IR 1 at 9, Lee J made a number of observations concerning those factors which might inform whether it is ‘appropriate in all the circumstances of the case to make an order requiring the employer to pay to the employee compensation of such amount as the court thinks appropriate’ in respect of a contravention of the relevant Division of the Industrial Relations Act 1998 (Cth) (‘the IR Act’) for the purposes of s 170EE of the IR Act. That particular legislation also set a cap upon the amount of the compensation that might be ordered. As a matter of general principle, Lee J considered that the court would have regard to ‘what is reasonable in the circumstances’ and would consider ‘the detriment occasioned to the employee by the employer’s contravention of the Act’ and the extent to which ‘it is reasonable to compensate the employee for such consequences’. In some cases, it may be appropriate to include in the measure of compensation a sum ‘sufficient to compensate an employee for mental distress or injured feelings caused by a harsh, unjust or unreasonable termination of employment’. Although the statutory context is, of course, a different one, notions of what might be ‘reasonable’ are relevantly analogous to notions of what is ‘appropriate’. A consideration of a compensable component of mental distress in the context of conduct characterised as an unjust or unreasonable termination of employment suggests such a consideration would be more so relevant in the circumstances of the prohibited purposes identified by the Workplace Relations Act 1996 (s 298L(1)) and the objects the Act seeks to achieve by force of the prohibition.
The applicant’s evidence was that as a result of his dismissal he attended counselling sessions. This broad statement was not particularised. Further he complained that he had to register with Centrelink for unemployment benefits, an experience which he says he found extremely degrading and humiliating. Finally, he complained that his dismissal also put excessive financial and emotional stress on his partner and entire family. These are the sorts of emotions that one would ordinarily expect to be experienced in any instance of dismissal, lawful or otherwise. Accordingly it is important to give particular consideration to “the context of conduct characterised as unjust or unreasonable termination of employment”[17] to properly assess his entitlement to damages.
[17] McIlwain v Ramsey Food Packaging Pty Ltd (No.4)at [87]
If I am wrong in my finding on liability and the circumstances surrounding the applicants termination constituted a contravention then in my view the circumstances were not egregious. For instance there is nothing to suggest that the other employees had appointed or recruited the applicant as their spokesperson to address the matters that the applicant had sought to discuss with Mr Woodward. If anything the applicant appointed himself as spokesperson and sought to prosecute a line of argument which did not have the support of his fellow employees. For instance Mr Garton observed that the applicant appeared to agitate issues concerning the move to the office and indeed instigated a meeting between Mr Garton and Mr Woodward which the applicant attended. Mr Garton appeared to have been mollified by the outcome of that meeting. Mrs Charles (Nee Heiner) gave evidence to a similar effect. Despite these matters the applicant persisted notionally on their behalf. In my view the applicant was to some extent engaged in pursuing a frolic of his own. The exasperation of his distress beyond the usual distress which might be expected and that could be attributed to the purported contravention was minor. In my view an allowance of $1.000.00 represents a reasonable assessment under that heading.
The applicant also seeks compensation for economic loss. It is not contested that the applicant was unemployed between the termination of his employment and 13 January 2012 at which time he commenced employment with Softlogic Australia Pty Ltd. The evidence demonstrated that he took all reasonable steps to secure alternate employment following termination. Given his age, skills and the general economic climate I do not consider his efforts to have been unreasonable. The applicant claims for $75,075.00 lost income. His annual income was $81,900.00 or $6,825.00 dollars monthly. The value of the additional fringe benefits including motor vehicles, telephones, etc were not quantified. In these circumstances a sum equating to eight and a half months pay less the value of other income received would reasonably approximate the quantum of the applicant’s economic loss. That sum is $58,012.50.[18]
[18] 3 May 2011 to Mid Jan 2012 – $6,825.00 x 8.5 = $58,012.50
However, in this case the respondent contends that the circumstances of the applicants employment were such that it was inevitable that the relationship between the applicant and the respondent would have come to an end “one way or the other”[19] because of the very negative views that the applicant held of Mr Woodward as the manager of the respondent company. Given the background tension between the parties and the fact that there had been an earlier purported termination, together with a significant change in work practice by having all the parties working together in the one office, I think it is highly probable that sooner rather than later issues between the applicant and Mr Woodward would have come to a head. I do not think that the applicant would have resigned in a fit of pique. I do however think he would have been inclined to negotiate a termination package or, had he failed to do so, that the respondent would have sought to performance manage him out of its employment. In either event I am satisfied that within a month or two of the parties all commencing to work from the one premises these matters would have come to a head with the result that by one means or another the applicant’s employment would have come to an end within a further two to three months. In that event, I think it is likely, allowing for a termination process, the applicant would have had no more than five months income from the respondent from the date of termination in May 2011. I think it is appropriate to discount the applicant’s assessed award to factor in this contingency.
[19] Final submissions of Respondent at para [139]
The other contingency contended for by the applicant concerned the prospect of early retirement given the applicant’s age. I reject that contention. Later events demonstrate the unlikely prospect of that outcome. Not only did the applicant state that he could not afford to retire, a statement which I accept, but later events concerning him securing other employment evidenced a desire not to retire. I do not think any allowance ought to be made in the assessment of compensation for this contingency.
In summary I assess the applicant’s entitlement to compensation at $35,125.00 in the event of a contravention being established. That sum is made up as follows:
Non Economic Loss – Compensation for hurt and distress
$1,000.00
Economic Loss – Loss of Salary for 5 months
$34,125.00
Total:
$35,125.00
Interest
Interest may be awarded on the amounts of compensation awarded to an applicant where there has been a contravention of Part 3-1 of the FW Act that did not involve an amount that a person “…was required pay to, or on behalf of another person under this act, or a Fair work instrument ” as provided for in s.547 of the FW Act.[20] Section 76(1) of the Federal Magistrates Court Act 1999 is in terms materially similar to s.51(A) of the Federal Court Act 1976. The principles applicable to calculation of interest under the Federal Court Act apply with equal force to the Federal Magistrates Court Act. It follows that the right of interest to be awarded on the amounts up to judgment may be as per Practice Note CM16 of the Federal Court of Australia. That is the court will have regard to an amount of 4% additional to the cash rate last published by the Reserve Bank of Australia. The current cash rate is 3.0%, therefore it follows interest ought to be calculated at 7.0%. On my reckoning interest to judgment is sum of $2,458.75 made up as follows.[21]
[20] Australian Licensed Aircraft Engineers Association v International Aviation Services Assistance Pty Ltd (Supra) at [451 – 453] and [457 – 460].
[21] $35,125 x 0.07 x (22/12 (May 11 to Mar 13)= $4,507.71
Conclusion
The applicant expressed strong disagreement with Mr Woodward, the director of the respondent company, about his manner and style of managing the respondent company. Notwithstanding a long standing association between them, both as partners and more recently as employer/employee the relationship did not end well, namely the termination of the applicant’s employment.
The applicant alleged the termination constituted a contravention of s.341(1)(c)(ii) of the FW Act and claimed for compensation.
In my view the circumstances did not give rise to a contravention. Complaints concerning the management of a small business do not constitute complaints or inquiries in relation to an employee’s employment within the meaning of s.341(1)(c)(ii) of the FW Act.
In the event I am wrong in my conclusion concerning the alleged contravention I asses the applicant’s entitlement to compensation at $35,125 together with interest of $4,507.71.
Orders
The application filed on 17 May 2011 is dismissed.
I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 8 March 2013
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